Using the data provided in BE12-10, assume that Darrien also spent $12,500 to promote and launch the product that the manufacturing equipment is used to produce. Explain the accounting for these costs.
In exercise
Darrien Corporation purchased a trade name, customer list, and manufacturing equipment for a Jump sum of $800,000. The fair market values of each asset are $280,000, $290,000, and $320,000, respectively. There were initial operating losses of $14,500 during the first four months after the assets were put into use. Prepare the journal entry to record the treatment of these costs.